Back
2021 Supreme(Online)(KER) 24193
HIGH COURT OF KERALA
A. BADHARUDEEN, J
HAMEED CHUNDAN PATTA – Appellant
Versus
SHRIRAM TRANSPORT FINANCE CO.LTD – Respondent
OP(C)/622/2021
Executing courts must provide detailed and substantiated reasons for valuing properties when fixing upset prices in execution proceedings under the Arbitration Act.
Headnote:
Arbitration - Execution Proceedings - Arbitration and Conciliation Act - Section on Supervision - The court clarified the limited jurisdiction in execution proceedings under the Arbitration Act, emphasizing the need for proper valuation and speaking orders in fixing upset prices.
Fact of the Case:
The petitioner contended that the executing court undervalued a property at Rs.38 Lakh, asserting it should be worth Rs.70 Lakh, but failed to provide supporting documents. The objection was not considered in the initial ruling.
Finding of the Court:
The court criticized the executing court's lack of detail in its order for fixing the upset price and determined that the case required a fresh valuation considering available materials.
Issues: Whether the executing court adequately justified its fixation of the upset price and if the petitioner was entitled to a revision of that decision.
Ratio Decidendi: The court held it necessary for executing courts to issue speaking orders that substantiate valuation determinations, ensuring transparency in the fixation of upset prices in execution proceedings.
Final Decision: The impugned order is set aside and the matter is remitted to the execution court for a fresh valuation of the property.
J U D G M E N T
The petitioner herein is the judgment/award debtor in O.P(Arb.) No.225 of 2015, where from E.P No.135 of 2018 is originated, which is now pending before the Additional District Court - III, Manjeri. The respondent herein is the award holder in the above arbitration award. The specific case put up by the petitioner is that the executing court fixed the value of the property to be sold as Rs.38 Lakh and the said amount is too low. According to the learned counsel for the petitioner, the house itself would fetch Rs.20 Lakh and the property would fetch Rs.50 Lakh. Thus the total value of the property to be fixed at Rs.70 Lakh. This is the contention raised in his objection filed before the executing court. This is on the basis of which the order dated 07-01-2021 of the Additional District Judge, Manjeri is put under challenge.
2. The learned counsel for the petitioner would point out that though this specific objection was raised by the petitioner herein before the court below the same was not considered at all. However the learned counsel for the petitioner fairly conceded that no documents to substantiate the land value at Rs.70 Lakh was produced before the executing court or before this Court. On perusing the objection, it could be gathered that the petitioner herein claimed the value of the property as Rs.70 Lakh viz., Rs.20 Lakh for the house and Rs.50 Lakh for the property. But in the original petition it is specifically stated that the total value of the property and building would come to Rs.52 Lakh (Rs.2 Lakh for the house + Rs.50 Lakh for the property). Thus it appears that the petitioner has no consistent case as to what actually is the value of the property proposed to be put in auction. However, the learned counsel for the petitioner would point out that the calculation stated in the civil original petition is a mistake and the petitioner is confining his contention to the effect that the property would fetch Rs.70 Lakh as stated in the objection.
3. The learned counsel for the respondent would submit that the jurisdiction of this Court to entertain challenge in relation to execution proceedings under the Arbitration Act is too limited and in support of this contention, the learned counsel produced a decision reported inDeep Industries Ltd. (M/s.) v. Oil & Natural Gas Corporation Ltd, and Another ( 2019 KHC 7192 ). No doubt, this is the correct legal position. At the same time, this Court is not powerless and the said power is confined to supervisory jurisdiction.
4. According to the learned counsel for the respondent, the court below rightly fixed with the upset price and proceeded with the sale of the property, wherein, the petitioner even failed to deposit Rs.21 Lakh agreed to be paid by way of mutual consent, years back.
5. The crux of this case confines to fixation of upset price by the executing court. When reading Ext.P5 order, the diary extract whereby the execution court fixed the upset price and ordered sale of the property on 16-03-2021, it appears that no details regarding the value of the property or what are the documents/materials relied on by the court below to fix the value of the property, etc. To be more explicit, the order impugned would go to show that the same is not a speaking order containing necessary details justifying the order in the matter of fixation of proper value of the land and even the name of the Judge, who passed the order. I am surprised with the order of such a nature and no other comments in this regard for the time being. In view of the matter, the order is liable to be set aside and the matter required to be remitted back to the execution court for passing a fresh order for fixing proper property value and upset price in accordance with law. Therefore Ext.P5 order is set aside and the matter is remitted back to the execution court with a direction to pass fresh speaking order in relation to the draft sale proclamation after fixing the actual market value of the pr
